0. Lesson 03 Retailing in Electronic Commerce
ISM 41113, Electronic Commerce
By:
M. Fathima Rashida
Lecturer in MIT
Department of MIT
Faculty of Management and Commerce, SEUSL

1. Learning Objectives
Describe electronic retailing (e-tailing) and its characteristics.
Define and describe the primary e-tailing business models.
Describe how online travel and tourism services operate and their impact on the industry.
Discuss the online employment market, including its participants, benefits, and limitations.
Discuss cyber banking and online personal finance.
Describe on-demand delivery of groceries and similar products/services.
Describe the delivery of digital products and online entertainment.
Discuss various online consumer aids, including comparison-shopping aids.
Describe disintermediation and other B2C strategic issues.
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2. Internet Marketing and Electronic Retailing
Overview Of Electronic Retailing
A retailer is a sales intermediary, a seller that operates between manufacturers and customers
Electronic Retailing (E-tailing)
Retailing conducted online, over the Internet called as e-tailing
E- tailers
Retailers who sell over the Internet  B2C: B2B
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3. Internet Marketing and Electronic Retailing
What Sells Well On The Internet
Travel
Computer hardware and software
Consumer electronics
Office supplies
Sport and fitness goods
Books and music
Toys and hobbies
Health and beauty
Entertainment
Apparel and clothing
Jewelry
Cars
Services
Food and drugs
Pet supplies
Others
Travel  expedia, Travelocity
Sport  fogdog.com
Services  travel service, stock trading service, electronic banking service, …
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4. Internet Marketing and Electronic Retailing
Characteristics Of Successful E-tailing
Following characteristics are expected to facilitate higher sales volume:
High brand recognition  Dell, Sony
A guarantee provided by highly reliable or well-known vendors  Dell
Digitized format  software, music or videos
Relatively inexpensive items  office suppliers, vitamins
Frequently purchased items  groceries, prescriptions drugs
Commodities with standard specifications  books, CDs, airline tickets
Well-known packaged items that cannot ne opened even in a traditional store  food, chocolates vitamins
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5. E-Tailing Business Models
B2B, B2C
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6. E-Tailing Business Models
Classification By Distribution Channel
Direct marketing by mail-order retailers that go online
Broadly, marketing that takes place without intermediaries between manufacturers and buyers
Direct marketing by manufacturers
Pure-play e-tailers
Firms that sell directly to consumers over the Internet without maintaining a physical sales channel
General purpose  amazon
Specialized e-tailers  Cattoys.com
Click-and-mortar retailers
Internet (online) malls
Online shopping center where many online stores are located
2. Advantages to sellers and customers  dell
3. amazon: adv  no overhead cost and streamlined processes: drawback  lack of established infrastructure to support
4. Physical + online: started traditional business then click and mortar
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7. E-Tailing Business Models
Other B2C Models And Special Retailing
Transaction brokers
Information portals
Community portal and social networks
Content creators or disseminators
Viral marketing
Market makers
Make (build)-to-order
B2B2C
Service providers
B2C In Social Networks
SOCIAL COMMERCE  in the era of web 2.0, setting up an e- tailer and waiting for customers to log on is no longer enough.
 Instead, companies are being more proactive, finding ways to engage customers, build relationships and create communities
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8. Travel and Tourism (Hospitality) Services Online
Online travel bookings and associated travel services are one of the most successful e-commerce implementations
Special Services Online
Conventional services +
Wireless services
Direct marketing
Alliances and consortia
Travel-Oriented Social Networks
Wireless  updated information, booking, cancelling air tickets  Cathay pacific, delta
Direct marketing  airlines sell e-tickets. Customer print when arrival at airport pay by credit card  electronic kiosk
Alliances and consortia  airlines and other travel companies are creating alliances to increase sales or reduce purchasing costs.
zuji.com  dedicated to Asia- pacific travelers
 Travelocity  some hotel chains, car rental: providers providing specializes in tour packages in region
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9. Travel and Tourism (Hospitality) Services Online
Benefits And Limitations Of Online Travel Services
Benefits
The amount of free information is tremendous
Information is accessible at any time from any place
Substantial discounts
Limitations
Many people do not use the Internet
The amount of time and the difficulty of using virtual travel agencies can be significant
Complex trips or those that require stopovers might not be available online
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10. Travel and Tourism (Hospitality) Services Online
Corporate Travel
Many large corporations receive additional services from large travel agencies
To reduce corporate travel costs, companies can make arrangements that enable employees to plan and book their own trips
Travel authorization software that checks availability of funds and compliance with corporate guidelines is usually provided by travel companies
Eg: amaricanexpress.com, expedia.com, Travelocity.com, orbitz.com
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11. Travel and Tourism (Hospitality) Services Online
Impact Of EC On The Travel Industry
Direct impacts because customers increasingly using the Internet to make bookings
Indirect impacts because airlines and hotel chains encouraging customers to book direct or through online wholesalers, bypassing travel agents
Investing in content (information, travel advice, and the like) is a requirement for success in this competitive market
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12. Employment Placement and the Job Market Online
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13. Employment Placement and the Job Market Online
The Internet Job Market
The following parties use the Internet job market:
Job seekers  hotjobs
Employers seeking employees
Classified ads
Job agencies  hotjobs, AOL
Government agencies and institutions  jobsearch.gov.au
A Consortium of Large Employers and College Career Advisors
Online Job Markets on Social Networking
Consortium  IBM: the National Association of Colleges and Employers  nacelink.com
Online job  MySpace, LinkedIn
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15. Employment Placement and the Job Market Online
Benefits And Limitations Of The Electronic Job Market
Probably the biggest limitation of the online job market is the fact that some people do not use and do not have access to the Internet, although this problem has declined substantially
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17. Banking and Personal Finance Online
Electronic (online) banking or e-banking
Various banking activities conducted from home or the road using an Internet connection; also known as cyberbanking, virtual banking, online banking, and home banking
Home Banking Capabilities
Informational, administrative, transactional, portal, and others
Virtual Banks
Have no physical location; only conduct online transactions
International And Multiple-currency Banking
Support global transactions
Virtual banks  Security First Network Bank (SFNB)  now part of RBC Centura (rbccentura.com): First Internet Bank US (firstib.com)
International  tradecard, mastercardm bank of america
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18. Banking and Personal Finance Online
Online Financial Transaction Implementation Issues
Securing Financial Transactions
Access to Banks’ Intranets by Outsiders  Bank of America
Imaging Systems
Fees Online Versus Fees for Offline Services
Risks
Personal Finance Online
Online Billing and Bill Paying
Taxes
Images of checks, invoices, and other related online correspondence  bank of America, citybank
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19. On-Demand Delivery of Products, Digital Items, Entertainment, and Gaming
e-grocer
A grocer that takes orders online and provides deliveries on a daily or other regular schedule or within a very short period of time
on-demand delivery service
Express delivery made fairly quickly after an online order is received: Albertsons.com, woolworths.com.au
E – tailers using postal system to deliver product  FedEx, DHL
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20. On-Demand Delivery of Products, Digital Items, Entertainment, and Gaming
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21. Online Purchase-Decision Aids
Shopping Portals
Gateways to e-storefronts and e-malls; may be comprehensive or niche oriented
Shopping Robots (Shopping Agents Or Shopbots)
Tools that scout the Web on behalf of consumers who specify search criteria
Business Ratings Sites
Trust Verification Sites
Other Shopping Tools
Shoping portals  several collections, price comparison
Rating sites  bizrate.com, consumberreports.org, forrester.com…
Trust  truste.com,  TRESTe seal
Other  digital intermediaries: decision making  pricescan.com for price comparison,  onlineshoes.com for shoes comparison
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22. Issues in E-Tailing Disintermediation
The removal of organizations or business process layers responsible for certain intermediary steps in a given supply chain
Reintermediation
The process whereby intermediaries (either new ones or those that had been disintermediated) take on new intermediary roles
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24. Issues in E-Tailing Cybermediation (Electronic Intermediation)
The use of software (intelligent) agents to facilitate intermediation
Channel Conflict
Situation in which an online marketing channel upsets the traditional channels due to real or perceived damage from competition
Determining The Right Price
Product And Service Customization And Personalization
Fraud And Other Illegal Activities
How To Make Customers Happy
Cybbermediation  special web sites that use intelligent agents to facilitate intermediation: can conduct price comparison, insurance policies, …
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